ATO deputy commissioner says there are ‘legitimate reasons why a company may not pay tax’
One hundred and sixty-eight of Australia’s biggest companies have paid no tax since 2013 despite reaping profits totalling more than $9.85bn, a Guardian Australia analysis of new data reveals.
They are among companies included in figures released by the Australian Taxation Office on Friday detailing the revenue, profit and tax paid by about 2,300 of the country’s biggest corporations in the 2019-20 financial year.
Previous ATO data dumps cover the period between 2013-14 and 2017-18, making it possible for Guardian Australia to determine which companies contained in the figures have not paid tax over the seven years for which numbers are available.
The companies that paid no tax over the period include household names such as property developer Lendlease and the Australian arms of multinationals including oil and gas major Chevron and German engineering and technology group Bosch.
Reasons why the companies have paid no tax vary. Some, including Lendlease, are part of property trust groups, where paying tax is the responsibility of the investor rather than the company.
Some companies that did not pay any tax, such as subsidiaries of BHP and Rio Tinto, are members of corporate groups where another entity paid their taxes for them.
Others, including Australian Chevron subsidiary Chevron Australia Holdings, have hefty losses run up in previous years that they are able to draw upon to offset their tax payments.
The data also illustrates the rollercoaster ride that Qantas has been on as it swung from a $2.8bn loss in 2013-14 and back into profit. It took until 2017-18 for the flag carrier to eat through its prior year losses and pay some tax – a relatively modest $11m.
In 2018-19 the company paid significantly more, $259m, off the back of taxable income – the tax equivalent of profit – of $942m.
But the coronavirus crisis, which grounded much of the fleet, drove the airline to a $1.9bn loss in 2019-20 and its tax bill back to zero. Qantas lost another $2.35bn in the year just gone, meaning it is unlikely to pay tax for several years to come even as air travel resumes after the pandemic and the company moves back into the black.
Speaking ahead of the release of the most recent set of corporate tax transparency figures, ATO deputy commissioner Rebecca Saint said there were “legitimate reasons why a company may not pay tax”.
“Just because an entity doesn’t pay tax doesn’t necessarily mean that there’s tax avoidance or similar activity occurring. There can be good commercial justification to that,” she said.
“We have high levels of confidence around those entities that don’t pay tax and what I mean by that is we actually go and have looked into whether those losses are generated from commercial activities, as opposed to tax avoidance arrangements.”
One-third, or 782, of the 2,370 companies captured in the 2019-20 data set paid no tax that year.
The data is published under laws introduced when Labor was in power federally and includes the revenue, taxable income and tax paid by public and foreign-owned companies with a turnover of $100m or more and Australian private companies with a turnover of $200m or more.